Posts Tagged ‘solar’

photo: Walmart

I wrote this story for Grist, where it first appeared.

When Walmart announced on Monday that it would install 15 megawatts’ worth of solar arrays on as many as 30 of its stores in California and Arizona, it set out to shape the solar market in more ways than one.

The reason? The world’s biggest retailer specified that many of the new solar installations should use thin-film photovoltaic panels. Thin-film solar cells are printed or deposited on glass or flexible materials. And although they are less efficient at converting sunlight into electricity, they can be produced at a lower cost than traditional crystalline silicon solar cells.

Thin-film solar currently accounts for just about 20 percent of the solar market. The most technologically advanced versions have had a difficult time grabbing market share due to competition with low-cost Chinese crystalline silicon manufacturers and a recession that has dried up investor funding.

Enter Walmart.

“By leveraging our global scale to become a more efficient company, we are able to lower our expenses and help develop markets for new technologies,” Kim Saylors Laster, Walmart’s vice president of energy, said in a statement. “Developing and incorporating new renewable energy sources, like thin film, reduces energy price risk and aligns very well with our commitment to solving business challenges through technology.”

Walmart signed a deal with SolarCity, a leading Silicon Valley solar installer, to manage the project. SolarCity will install and own the photovoltaic arrays on Walmart stores and sell the electricity to the retailer.

SolarCity’s chief executive, Lyndon Rive, told me Monday that the company will install thin-film solar arrays made by First Solar and Miasolé.

First Solar, which makes an older variant of the technology called cadmium telluride, is the world’s biggest thin-film manufacturer and Walton family members were early investors in the Tempe, Ariz., company. First Solar is also an investor in SolarCity, which already uses its photovoltaic panels.

Miasolé, a Silicon Valley startup, is one of a number of companies that has developed a type of thin-film solar cell called copper indium gallium selenide, or CIGS, that offers the promise of higher efficiencies and lower costs.

“Walmart wanted to see thin-film be adopted and made that a requirement in the bidding process,” says Rive.

He noted that the retailer did not dictate the percentage of stores that should receive thin-film solar arrays but expects the technology will account for the majority of installations over the next year.

“There’s no hard and fast number but they’d like us to do as much as possible,” said Rive.

Another twist in the Walmart deal is that the company collaborated with the Environmental Defense Fund (EDF) to develop the criteria used to select SolarCity. (EDF, which maintains an office near Walmart’s headquarters in Bentonville, Ark., has long worked with the retailer on sustainability initiatives.)

The goal, Walmart said in a statement, “was to identify the most innovative solar technologies that would create benefits on three fronts — to the environment, technology, and financial viability.”

The bigger ambition, though, is to shape the solar market, as Walmart acknowledged.

“The company’s large scale on-site installation of CIGS could help further the development of this technology and bring it to market quicker, while use of cadmium telluride thin film could help make the case for other businesses to adopt the technology for on-site commercial use.”

As the Great Recession drags on in California — unemployment rate: 12.4 percent, state government in a state of collapse — the solar boom continues.

The Golden State’s decade-long program to install 3,000 megawatts of photovoltaic arrays on residential and commercial rooftops kicked off in 2007, not too long before the global economic collapse began.

Only three years in, the program — known as the California Solar Initiative — has achieved 42 percent of its 1,750 megawatt target in markets served by the state’s three, big investor-owned utilities, according to a report released Friday by the California Public Utilities Commission. Completed projects account for 20 percent of that 42 percent figure, while another 22 percent are pending installations. (In 2009, the solar program eliminated 180,136 tons of carbon, the equivalent of taking 31,000 cars off the road.)

Demand for solar is accelerating even as the housing market remains in the doldrums. Applications for the solar rebate program hit a high of 134 megawatts in April, and in the first six months of 2010 a total of nearly 300 megawatts’ worth of projects were received.

“The monthly demand for new applications has been well over 1,000 applications per month for the past year,” the report stated.

And Californians’ appetite for solar has grown even as the rebate for new photovoltaic systems has declined, as it is designed to do over the life of the program.

State and federal tax incentives have cut the cost of a solar array roughly in half. And last year’s global glut of photovoltaic modules and the influx of Chinese solar companies into the U.S. market has led to drops in the price of solar panels. (Installation costs still account for about half the price of a solar array.) Overall, the cost of solar systems smaller than 10 kilowatts has dropped by 15 percent between 2007 and 2010 while the price of bigger arrays has fallen 10 percent, according to a report released Friday by the California Public Utilities Commission. (In general, a 10-kilowatt solar array could power a large home or commercial building.)

But one of the biggest factors persuading Californians to go solar appears to be the increasing availability of solar leases. These financial arrangements allow homeowners to have a system installed at little or no upfront cost in exchange for a monthly fee.

Companies such as SolarCity, Sungevity, and SunRun offer solar leases and retain ownership of the rooftop arrays. In 2009, such ownership of solar systems enrolled in the state program jumped 155 percent. Forty percent of the megawatts now generated through the program are owned by leasing companies or other third parties.

Fueling that trend has been the hundreds of millions of dollars that financial giants such as U.S. Bancorp have poured into solar financing funds for SolarCity, Sungevity, and SunRun. So far this year, PG&E Corporation, the parent company of California utility PG&E, has created funds totaling $160 million to finance solar leases for SolarCity and SunRun customers.

photo: TXU Energy

In The New York Times on Thursday, I wrote about Texas utility TXU Energy hooking up with Silicon Valley’s SolarCity to offer its Dallas area customers the option of going solar:

TXU Energy, a Texas utility with two million customers, is making it possible for homeowners in the Dallas area to lease or buy rooftop solar-power systems in one of the first programs of its kind.

The energy provider said Wednesday that it had signed a deal with SolarCity, a Silicon Valley start-up that finances and installs residential rooftop arrays, to manage the initiative.

“Our vision is to supply solar power to millions of homes and businesses,” said Lyndon Rive, SolarCity’s chief executive. “The only way to achieve this is by partnering with companies that are providing power today. If we can partner with energy providers, adoption will happen much faster.”

Homeowners will sign up for the TXU Energy Solar Program through the utility, and SolarCity will design and install the solar-panel systems. Under the lease program, the owner of a three- to four-bedroom house would typically pay about $35 a month after tax incentives, according to TXU Energy.

SolarCity retains ownership of the photovoltaic arrays and responsibility for their maintenance. The solar-power system could be bought outright for about $26,000, TXU Energy said.

SolarCity will pay a referral fee to TXU Energy for each system leased or sold.

Along with the rest of the economy, venture capital investment in green technology has fallen off the proverbial cliff, according to a survey released Wednesday by market research firm the Cleantech Group.

Global investment in renewable energy, electric cars and other green tech dropped 48% to $1 billion in the first quarter of 2009 from the previous year and fell 41% from the previous quarter. (Global here being defined as North America, Europe, China and India.)

The survey, conducted with Deloitte, found that the size of the average round of funding also crashed, from $20 million in the fourth quarter of 2008 to $12.3 million in the first quarter.

“Venture funds continue to invest significant sums, albeit at a slower pace and smaller scale than in the past two years,” Brian Fan, the Cleantech Group’s senior director of research, said in a statement.

North America remains the epicenter of green tech investing, with nearly two-third of all of investments in the first quarter.

photo: Freescale

Freescale Semiconductor on Monday is unveiling a new power conversion technology that the chipmaker says will dramatically enhance the efficiency of solar cells and other devices by allowing them to operate at low voltages.

That means a single solar cell attached to a mobile phone or other handheld device could charge the gadget. The bigger potential is to maximize the electricity generated from rooftop solar panels. which typically contain a dozen or more solar cells each. When a cloud or a tree shades part of a solar panel, power output from all the solar cells drops because they are linked together. By integrating Freescale’s power converter into each solar cell, those that aren’t shaded can still produce electricity, according to Arman Naghavi, general manager of Freesale’s Analog, Mixed-Signal & Power Division.

That’s because each solar cell can operate at much lower voltages when Freescale’s (FSL) converter is used. While most electronics need a jolt of 700 millivolts to begin working, Freescale’s technology allows them to operate on as little as 320 millivolts. (See video below.)

Sounds geeky but the consequences could be far-ranging, reducing electricity consumption and opening the door to a new generation of solar-powered devices. One big hurdle to using solar cells to power everything from laptops to street lights is that it takes too many of them to produce enough power to be practicable. After all, who’s going to carry around a solar panel to charge their MacBook.

Freescale’s technology could change that equation. “For instance, you wouldn’t have to put a battery in a garage door opener – just add a solar strip on the remote control,” Kevin Parmenter, a Freescale applications engineering manager, told Green Wombat. (Samsung last week announced it would start selling a mobile phone (photo above) equipped with a solar panel but it’s unclear just how much talk or texting time it would allow.)

Other uses are more sci-fi: self-powered nanosensors that tap the technology to harvest ambient heat or friction in the environment.

The converter will hit the market in the second half of 2009. Potential customers include solar cell makers like SunPower (SPWRA) and Suntech (STP) as well as biomedical companies and defense contractors. Freescale, headquartered in Austin, Texas, was spun out of Motorola (MOT) in 2004.

“It really helps the entire green movement,” says Naghavi. “We are seeing a tremendous interest from lots of areas historically we have never touched or played in.”

It’s a start, but that’s less than 7% of the entire stimulus package (or, about enough to pay for the Iraq war for five months, or somewhat more than what the federal government is spending to bail out Bank of America). The lion’s share of the cash is devoted to smart grid technology and transmission lines, with a second big chunk going toward energy efficiency retrofits of public housing and weatherization of low-income homes.

That’s good news for a host of startups developing smart grid technology. But the the bill does not address the most pressing issue facing renewable energy companies today: the credit crunch has dried up financing just as billions are needed to fund factories and the construction of solar power plants and wind farms that will be connected to smart grids and new transmission lines. In recent weeks, layoffs have hit the solar industry. OptiSolar – a Bay Area thin-film solar startup that’s building a 550-megawatt photovoltaic power plant to supply electricity to utility PG&E (PCG) – reported to have furloughed half its workforce. And according to The Oregonian newspaper, SpectraWatt, a solar cell maker spun off from chip giant Intel (INTC) last year, has shelved plans for a factory in Hillsboro, Ore. Friday morning, Kate Galbraith at The New York Times’ Green Inc. blog reported that layoffs have now hit the wind industry.

The retrenchment comes as utilities are counting on solar power plants and wind farms to come online in the next two years to help them meet mandates to obtain a growing percentage of the electricity they sell from renewable sources. In California, for instance, PG&E, Southern California Edison (EIX) and San Diego Gas & Electric (SRE) have signed more than four gigawatts’ worth of contracts for electricity to be produced by large-scale solar power stations that will cost billions to build.

Solar startups rely on a provision that allows them to take a 30% tax credit on the cost of building a power plant. Now most of these companies are startups and have no way to use those tax credits as they’re not profitable. Instead, a solar company must essentially trade the tax credits to a firm that can use them in exchange for cash to finance construction. But investors in these deals have all but disappeared as the financial crisis takes its toll. Which is why solar and wind lobbyists are pushing Congress to make the tax credits “refundable” – meaning those companies that don’t have tax liabilities can trade the credits for cash that can be used to finance power plants. “Due to the recession, projects are now being put on hold, factories are closing and workers face potential layoffs unless Congress refines the tax credits now so they work as originally intended,” said Solar Energy Industries Association CEO Rhone Resch in a statement.

The stimulus package unveiled Thursday undoubtedly will be subject to change, but as written it will boost efforts to modernize and digitize the United States’ aging analog power grid. The bill includes:

$11 billion for smart grid research and development, pilot projects and the construction of new transmission lines to connect green energy power plants to the power grid. The government will fund 50% of the cost of utilities’ smart grid investments.

The smart grid billions will be a boon to companies like Silver Spring Networks, Gridpoint and eMeter that develop software to allow utilities to monitor and manage electricity use in real-time and provide that data to their customers. “We think 2009 is going to be a good year for us,” eMeter president Larsh M. Johnson told Green Wombat last month. “We’ve seen continued demand from utilities for our services.”

But the billions for the smart grid can be considered a down payment: According to an estimate by research firm New Energy Finance, the price tag for modernizing the power grid over the next 15 years will be $450 billion.

The city’s Sustainable Energy Financing District could accelerate the adoption of rooftop solar by overcoming one of the biggest obstacles to homegrown green energy: the $20,000 to $30,000 upfront costs and long payback time for a typical solar system.

Here’s how the program will work: Berkeley will seek bond financing up to $80 million for the solar program – enough to install solar arrays on 4,000 homes and pay for some energy efficiency improvements. For those who sign up, Berkeley will pay for the solar arrays and add a surcharge to the homeowners’ tax bill for 20 years. When the house is sold, the surcharge rolls over to the new owner.

According to city staff, a typical solar array will cost $28,077 – you won’t find many McMansions in this city by the bay) – and after state rebates, $22,569 will need to be financed at an estimated interest rate of 6.75%. Berkeley is counting on obtaining a favorable interest rate given that the debt will be secured by property tax revenue. (And to answer the inevitable question, the foreclosure rate in Berkeley is low and property values have been relatively stable. How the meltdown on Wall Street will affect the program is another matter.)

For a typical solar system, the homeowner will be assessed an extra $182 a month on her property tax bill. To put that in perspective, the property tax bill on a $800,000 house – your basic middle-class home here if it was bought within the past three years – runs about $900 a month.

Electric bills are relatively low in Berkeley due to the temperate climate – Green Wombat’s was $15 in August. The real benefit of the program may come if it is used for solar hot water systems and expanded to pay for energy efficiency measures, such as installing new windows and insulation in Berkeley’s housing stock, most of which dates from the early 20th century.

The remaining hurdle is for the city to secure financing at a favorable rate. Once that is obatined, the program. which has won the support of local utility giant PG&E (PCG), should also be boon for solar panel makers and installers like SunPower (SPWR), SunTech (STP), Akeena (AKNS) and Sungevity.

The solar program is designed to help Berkeley meet a voter-approved mandate to cut its greenhouse gas emissions 80 percent by 2050.

About Green Wombat

Green Wombat is written by
Todd Woody, a veteran environmental journalist based in California who writes for The New York Times, the Los Angeles Times, Grist and Yale e360. He's one of the few people on the planet who have held a northern hairy-nosed wombat in the wild.

Todd formerly was a senior editor at Fortune magazine, an assistant managing editor at Business 2.0 magazine and the business editor of the San Jose Mercury News.